Q&A: Pitfalls for NGOs bidding on DFID contracts

By Molly Anders 25 July 2017
What are the biggest pitfalls among INGOs trying to make the switch to DFID contracts? Photo by: Everypixel

As the share of the United Kingdom’s aid spent through commercial contracts continues to grow, many international NGOs are making the switch from traditional grants to contracts.

The competition is stiff, as for-profit giants such as Adam Smith International, PricewaterhouseCoopers, KPMG and others flex decades’ worth of experience, vast overheads and, in some cases, entire departments designed around Department for International Development contracting. International NGOs are also often intimidated by DFID’s value for money indicators, and worry they won’t have the risk appetite to stomach its payment-by-results approach, in which the delivery partner is paid for its work only after the results are delivered.

Still, for many international NGOs, the benefits outweigh the risks. Organizations new to DFID are also in some cases finding subcontracting a viable way into the DFID market, as nonprofit colleagues such as the International Rescue Committee begin to offer opportunities for smaller or less-experienced organizations to join consortia.

Devex caught up with Haniya Dar, a consultant at Hamilton Verney and veteran DFID contract specialist, on the sidelines of the Bond Funding for Development Conference in London to learn about the biggest pitfalls she’s seen among INGO clients trying to make the switch to DFID contracts. Dar also shared her insights on some of the internal obstacles INGOs might face — drawing on her experience building the in-house contracting department at IRC, now one of the biggest nonprofit players in the DFID contracting pool — and flagged some of the most recent changes at DFID to watch in the commercial supplier space. The conversation below has been edited for length and clarity.